Without Ted's knowledge, Phil, who frequently purchased lumber on Ted's behalf, purchased a large quantity of plywood from Chris as agent for Ted. Phil later advised Ted of the purchase. As an agent, Phil must make certain that his principal is in existence at the time the contract is negotiated, otherwise, he would be liable for breach of warranty of authority.

Question

Quizplus · Accepted Answer

An agent must ensure that their principal exists and has the capacity to contract at the time of negotiation; otherwise, the agent could be held liable for acting without authority, leading to a breach of the warranty of authority.

Without Ted's Knowledge, Phil, Who Frequently Purchased Lumber on Ted's